EXHIBIT 10.14


 


INDEMNIFICATION
AGREEMENT


 


THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is
made as of
                                  ,
2008 by and among K-Sea GP LLC, a Delaware limited liability company (the “Company”),
K-Sea GP Holdings LP, a Delaware limited partnership (the “Partnership”), and
                                                
(“Indemnitee”).


 


PRELIMINARY
STATEMENT


 


WHEREAS, qualified persons are reluctant to serve
organizations as directors or officers or in other capacities unless they are
provided with adequate protection against inordinate risks of claims and
actions against them arising out of their service to and activities on behalf
of such organizations;


 


WHEREAS, the parties hereto recognize that the legal
risks and potential liabilities, and the threat thereof, associated with
lawsuits filed against persons serving the Company, the Partnership and/or
their respective subsidiaries, and the resultant substantial time, expense and
anxiety spent and endured in defending lawsuits bears no reasonable
relationship to the compensation received by such persons, and thus poses a
significant deterrent and increased reluctance on the part of experienced and
capable individuals to serve the Company, the Partnership and/or their respective
subsidiaries;


 


WHEREAS, the uncertainties related to obtaining
adequate insurance and indemnification have increased the difficulty of
attracting and retaining such persons;


 


WHEREAS, it is reasonable, prudent and necessary for
the Company and the Partnership to contractually agree to indemnify such
persons to the fullest extent permitted by law, so that such persons will serve
or continue to serve the Company, the Partnership and/or their respective
subsidiaries free from undue concern that they will not be adequately
indemnified; and


 


WHEREAS, the Indemnitee is willing to serve, continue
to serve and to take on additional service for an on behalf of the Company and
the Partnership on the condition that the Indemnitee is indemnified according
to the terms of this Agreement;


 


NOW, THEREFORE, in consideration of the premises and
the covenants herein, the parties to this Agreement agree as follows:


 


Section 1.  Services by Indemnitee.  Indemnitee will serve, or continue to serve,
as a Functionary of the Company and, as Indemnitee and the Company may agree,
as a Functionary of one or more Related Enterprises.  Indemnitee may at any time and for any reason
resign from any such service, subject to any other contractual obligation or
any obligation applicable law imposes. 
This Agreement is not and is not to be construed as an employment
contract by the Company or any other Related Enterprise with Indemnitee or as
otherwise affecting Indemnitee’s status, if any, as an employee of the Company
or any Related Enterprise.


 

















 


Section 2.  Indemnification.  (a)  If and whenever:


 


(1)           Indemnitee was or is, or is threatened to
be made, a party to any Proceeding by reason of:


 


(A)          the fact that Indemnitee serves or served
as (1) a Functionary of the Company or, at the request of the Company, (2) a
Functionary of a Related Enterprise; or


 


(B)           the actual or alleged service or conduct
of Indemnitee in Indemnitee’s capacity as that Functionary, including any act
actually or allegedly done or not done by Indemnitee;


 


and


 


(2)           Indemnitee (A) engaged in the
service or conduct at issue in that Proceeding in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company and, in the event that Proceeding was or is a criminal action or
proceeding involving Indemnitee’s conduct, (B) had no reasonable cause to
believe that that conduct was unlawful,


 


the Partnership will, or will cause another
Partnership Entity to, indemnify Indemnitee against, and hold Indemnitee
harmless from and in respect of:


 


(1)           in the case of each Claim in that
Proceeding, other than a Company Claim, all liabilities and losses, including
the amounts of all judgments, penalties and fines, including excise taxes, and
amounts paid in settlement, Indemnitee has suffered or will suffer, and all
Expenses Indemnitee reasonably has incurred or will incur, as a result of or in
connection with that Claim; and


 


(2)           in the case of each Company Claim in that
Proceeding, all Expenses Indemnitee reasonably has incurred or will incur as a
result of or in connection with that Company Claim; provided, however, that the
Partnership will not have any obligation under this clause (2) to, or to
cause another Partnership Entity to, indemnify Indemnitee against, or hold
Indemnitee harmless from or in respect of, any Company Claim as to which
Indemnitee was or is adjudged to be liable to the Company or any Related
Enterprise unless, and only to the extent that, the Court of Chancery or the
court in which that Company Claim was or is brought determines on application
that, despite the adjudication of liability, but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such of those Expenses as the Court of Chancery or that other
court shall deem proper.


 


(b)           If and whenever Indemnitee was or is, or is threatened
to be made, a party to any Proceeding of any type to which Section 2(a) refers
and has been successful, on the merits or otherwise, in defense of that
Proceeding, or in defense of any Claim therein, the Partnership will, or will
cause another Partnership Entity to, indemnify Indemnitee against, and hold
Indemnitee harmless from and in respect of, all Expenses Indemnitee reasonably
has incurred in connection


 


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therewith.  The rights of Indemnitee under this Section 2(b) are
in addition to, and independent of, the rights of Indemnitee under Sections 2(a) or
2(c).


 


(c)           If and whenever Indemnitee was, or
reasonably could have been expected to have been, or is, or reasonably could be
expected to be, by reason of the knowledge of facts Indemnitee actually or
allegedly has obtained in the course of his service as (1) a Functionary
of the Company or, at the request of the Company, (2) a Functionary of a
Related Enterprise, a witness in or a deponent in connection with any
Proceeding to which Indemnitee was or is not a party, the Partnership will, or
will cause another Partnership Entity to, indemnify Indemnitee against, and
hold Indemnitee harmless from and in respect of, all Expenses Indemnitee
reasonably has incurred or will incur in connection therewith.  The rights of Indemnitee under this Section 2(c) are
in addition to, and independent of, the rights of Indemnitee under
Sections 2(a) or 2(b).


 


Section 3.  Advancement of Expenses. (a) If
and whenever Indemnitee is, or is threatened to be made, a party to any
Proceeding that may give rise to a right of Indemnitee to indemnification under
Section 2(a), the Partnership will, or will cause another Partnership
Entity to, advance all Expenses reasonably incurred by or on behalf of
Indemnitee in connection with that Proceeding within 10 days after the Company
receives a statement or statements from Indemnitee requesting the advance or
advances from time to time, whether prior to or after final disposition of that
Proceeding.  Each such statement must
reasonably evidence the Expenses incurred by or on behalf of Indemnitee and
include or be preceded or accompanied by an undertaking by or on behalf of
Indemnitee to repay any Expenses advanced if it ultimately is determined that
Indemnitee is not entitled to be indemnified by the Company under Section 2(a) against
those Expenses.  The Partnership will
accept any such undertaking without reference to the financial ability of
Indemnitee to make repayment.  If the
Partnership or another Partnership Entity advances Expenses in connection with
any Claim as to which Indemnitee has requested or may request indemnification
under Section 2(a) and a determination is made under Section 5(c) that
Indemnitee is not entitled to that indemnification, Indemnitee will not be
required to reimburse the Partnership or that other Partnership Entity for
those advances until the 180th day following the date of that determination;
provided, however, that if Indemnitee timely commences and thereafter
prosecutes in good faith a judicial proceeding or arbitration under Section 7(a) or
otherwise to obtain that indemnification, Indemnitee will not be required to
reimburse the Partnership or that other Partnership Entity for those Expenses
until a determination in that proceeding or arbitration that Indemnitee is not
entitled to that indemnification has become final and nonappealable.


 


(b)           The Partnership or another Partnership Entity may
advance Expenses under Section 3(a) to Indemnitee or, at the Company’s
option, directly to the Person to which those Expenses are owed, and Indemnitee
hereby consents to any such direct payment, to Indemnitee’s legal counsel or
any other Person.


 


(c)           For the avoidance of doubt, the parties agree that the
provisions of this Section 3 shall be applicable during the pendancy of
any determination of the right of the Indemnitee to indemnification under Section 2(a),
including the pendancy of any court or arbitration proceeding contemplated by Section 7.


 


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Section 4.  Notification and Defense
of Claims.  (a)  If
Indemnitee receives notice, otherwise than from the Company, that Indemnitee is
or will be made, or is threatened to be made, a party to any Proceeding in
respect of which Indemnitee intends to seek indemnification hereunder,
Indemnitee must promptly notify the Company in writing of the nature and, to
Indemnitee’s knowledge, status of that Proceeding.  If this Section 4(a) requires
Indemnitee to give such a notice, but Indemnitee fails to do so, that failure
will not relieve the Company from, or otherwise affect, the obligations the
Partnership may have to indemnify Indemnitee under this Agreement, unless the
Company can establish that the failure has resulted in actual prejudice to the
Company.


 


(b)           Except as this Section 4(b) otherwise
provides below, in the case of any Proceeding in respect of which Indemnitee
seeks indemnification hereunder:


 


(1)           the Company and any Related Enterprise
that also may be obligated to indemnify Indemnitee in respect of that
Proceeding will be entitled to participate at its own expense in that
Proceeding;


 


(2)           the Company or that Related Enterprise,
or either of them, will be entitled to assume the defense of all Claims, other
than (A) Company Claims, if any, and (B) other Claims, if any, as to
which Indemnitee shall reasonably reach the conclusion clause (3) of
the next sentence describes, in that Proceeding against Indemnitee by prompt
written notice of that election to Indemnitee; and


 


(3)           if clause (2) above entitles the
Company or that Related Enterprise to assume the defense of any of those Claims
and it delivers to Indemnitee notice of that assumption under clause (2), the
Company will not be liable to Indemnitee hereunder for any fees or expenses of
legal counsel for Indemnitee which Indemnitee incurs after Indemnitee receives
that notice.


 


Indemnitee will have the right to employ Indemnitee’s
own legal counsel in that Proceeding, but, as clause (3) of the preceding
sentence provides, will bear the fees and expenses of that counsel unless:


 


(1)           the Company has authorized Indemnitee in
writing to retain that counsel;


 


(2)           the Company shall not within a reasonable
period of time actually have employed counsel to assume the defense of those
Claims; or


 


(3)           Indemnitee shall have (A) reasonably
concluded that a conflict of interest may exist between Indemnitee and the
Company as to the defense of one or more of those Claims and (B) communicated
that conclusion to the Company in writing.


 


(c)           The Partnership will not be obligated hereunder to, or
to cause another Partnership Entity to, indemnify Indemnitee against or hold
Indemnitee harmless from and in respect of any amounts paid, or agreed to be
paid, by Indemnitee in settlement of any Claim against Indemnitee which
Indemnitee effects without the Company’s prior written consent.  The Company will not settle any Claim against
Indemnitee in any manner that would impose any penalty or limitation on
Indemnitee without Indemnitee’s prior written consent.  Neither the


 


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Company nor Indemnitee will unreasonably delay or
withhold consent to any such settlement the other party proposes to effect.


 


Section 5.  Procedure for
Determination of Entitlement to Indemnification.  (a)  To obtain indemnification under
this Agreement, Indemnitee must submit to the Company a written request
therefor which includes, or is accompanied by, such documentation and
information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
that indemnification.  Indemnitee may
request indemnification hereunder at any time and from time to time as
Indemnitee deems appropriate in Indemnitee’s sole discretion.  In the case of any request for
indemnification under Section 2(a) as to any Claim which is
pending or threatened at the time Indemnitee delivers that request to the
Company and would not be resolved with finality, whether by judgment, order,
settlement or otherwise, on payment of the indemnification requested, the
Company may defer the determination under Section 5(c) of Indemnitee’s
entitlement to that indemnification to a date that is no later than 45 days
after the effective date of that final resolution if the Board concludes in
good faith that an earlier determination would be materially prejudicial to the
Company or a Related Enterprise.


 


(b)           On written request by Indemnitee under Section 5(a) for
indemnification under Section 2(a), the determination of Indemnitee’s
entitlement to that indemnification will be made:


 


(1)           if Indemnitee will be a director or
officer of the Company at the time that determination is made, under Section 5(c) in
each case; or


 


(2)           if Indemnitee will not be a director or
officer of the Company at the time that determination is made, under Section 5(c) in
any case, if so requested in writing by Indemnitee or so directed by the Board,
or, in the absence of that request and direction, as the Board shall duly
authorize or direct.


 


(c)           Each determination of Indemnitee’s entitlement to
indemnification under Section 2(a) to which this Section 5(c) applies
will be made as follows:


 


(1)           by a majority vote of the Disinterested
Directors, even though less than a quorum; or


 


(2)           by a committee of Disinterested Directors
designated by a majority vote of the Disinterested Directors, even though less
than a quorum; or


 


(3)           if (A) there are no Disinterested
Directors or (B) a majority vote of the Disinterested Directors so
directs, by an Independent Counsel in a written opinion to the Board, a copy of
which the Company will deliver to Indemnitee;


 


provided, however, that if Indemnitee has so requested
in Indemnitee’s request for indemnification, an Independent Counsel will make
that determination in a written opinion to the Board, a copy of which the
Company will deliver to Indemnitee.


 


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(d)           If it is determined that Indemnitee is entitled to
indemnification under Section 2(a), the Partnership will, or will cause
another Partnership Entity to, subject to the provisions of Section 5(f):


 


(1)           within 10 days after that determination
pay to Indemnitee all amounts (A) theretofore incurred by or on behalf of
Indemnitee in respect of which Indemnitee is entitled to that indemnification
by reason of that determination and (B) requested from the Company in
writing by Indemnitee; and


 


(2)           thereafter on written request by
Indemnitee, pay to Indemnitee within 10 days after that request such additional
amounts theretofore incurred by or on behalf of Indemnitee in respect of which
Indemnitee is entitled to that indemnification by reason of that determination.


 


Indemnitee will cooperate with the person, persons or
entity making the determination under Section 5(c) with respect to
Indemnitee’s entitlement to indemnification under Section 2(a), including
providing to such person, persons or entity, on reasonable advance request, any
documentation or information that is:


 


(1)           not privileged or otherwise protected
from disclosure;


 


(2)           reasonably available to Indemnitee; and


 


(3)           reasonably necessary to that
determination.


 


(e)           If an Independent Counsel is to make a determination
under Section 5(c) of entitlement to indemnification under Section 2(a),
it will be selected by the Company with the consent of the Indemnitee (which
consent shall not be unreasonably withheld). 
The Partnership will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting under Section 5(c),
and the Partnership will pay all reasonable fees and expenses incident to the
procedures this Section 5(e) sets forth, regardless of the
manner in which the Independent Counsel is selected or appointed.  If Indemnitee becomes entitled to, and does,
initiate any judicial proceeding or arbitration under Section 7, the
Company will terminate its engagement of the person or firm acting as
Independent Counsel, whereupon that person or firm will be, subject to the
applicable standards of professional conduct then prevailing, relieved of any
further responsibility in the capacity of Independent Counsel.


 


(f)            The amount of any indemnification against Expenses to
which Indemnitee becomes entitled under any provision hereof, including Section 2(a),
will be determined subject to the provisions of this Section 5(f).  Indemnitee will have the burden of showing
that Indemnitee actually has incurred the Expenses for which Indemnitee
requests indemnification.  If the
Partnership or a Partnership Entity has made any advance in respect of any
Expense incurred by Indemnitee without objecting in writing to Indemnitee at
the time of the advance to the reasonableness thereof, the incurrence of that
Expense by Indemnitee will be deemed for all purposes hereof to have been
reasonable.  In the case of any Expense
as to which such an objection has been made, or any Expense for which no
advance has been made, the incurrence of that Expense will be presumed to have
been reasonable, and the Company will have the burden of proof to overcome that
presumption.


 


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Subject to the provisions
of the preceding paragraph, the advancement of Expenses to Indemnitee under Section 3
will not, of itself, create a presumption that the Proceeding or Claim therein
to which those Expenses relate is a Proceeding or Claim of the type to which Section 2(a) applies.  If the Company, prior to or in connection
with the making any advance of Expenses under Section 3 to or for the
benefit of Indemnitee, notifies Indemnitee in writing that the Proceeding or
any Claim therein is or reasonably could be expected to be in whole or in any
specified part not one to which Section 2(a) applies, Indemnitee
will, to the extent those Expenses are reasonably allocable among the claims,
issues and matters involved in that Proceeding, cause Indemnitee’s counsel and
other service providers to effect that allocation.


 


Section 6.  Presumptions and Effect of
Certain Proceedings.  (a) 
In making a determination under Section 5(c) with respect to
entitlement to indemnification under Section 2(a), the person, persons or
entity making that determination must presume that Indemnitee is entitled to
that indemnification if Indemnitee has submitted a request for indemnification
in accordance with Section 5(a), and the Company will have the burden of
proof to overcome that presumption in connection with the making by any person,
persons or entity of any determination contrary to that presumption.


 


(b)           The termination of any Proceeding or of any Claim
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not, except as this Agreement otherwise
expressly provides, of itself adversely affect the right of Indemnitee to
indemnification hereunder or, in the case of any determination under Section 5(c) of
Indemnitee’s entitlement to indemnification under Section 2(a), create a
presumption that Indemnitee did not act in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company or, with respect to any criminal action or proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.


 


(c)           Any service of Indemnitee as a Functionary of the
Company or any Related Enterprise which imposes duties on, or involves services
by, Indemnitee with respect to any Related Enterprise that is an employee
benefit or welfare plan or related trust, if any, or the participants or
beneficiaries of that plan or trust will be deemed for all purposes hereof as
service at the request of the Company. 
Any action Indemnitee takes or omits to take in connection with any such
plan or trust will, if taken or omitted in good faith by Indemnitee and in a
manner Indemnitee reasonably believed to be in the interest of the participants
in or beneficiaries of that plan or trust, be deemed to have been taken or
omitted in a manner “not opposed to the best interests of the Company” for all
purposes hereof.


 


Service by a person as an
agent or representative of an Enterprise means service on behalf of that
Enterprise in its relations with persons and entities other than the Affiliates
and Functionaries of that Enterprise.


 


(d)           For purposes of any determination hereunder as to
whether Indemnitee has performed services or engaged in conduct on behalf of
any Enterprise in good faith, Indemnitee will be deemed to have acted in good
faith if Indemnitee acted in reliance on the records of the Enterprise or on
information, opinions, reports or statements, including financial statements
and


 


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other financial information, concerning the Enterprise
or any other Person which were prepared or supplied to Indemnitee by:


 


(1)           one or more of the officers or employees
of the Enterprise;


 


(2)           appraisers, engineers, investment
bankers, legal counsel or other Persons as to matters Indemnitee reasonably
believed were within the professional or expert competence of those Persons;
and


 


(3)           any committee of the board of directors
or equivalent managing body of the Enterprise of which Indemnitee is or was, at
the relevant time, not a member;


 


provided, however, that if Indemnitee has actual
knowledge as to any matter that makes any such reliance unwarranted as to that
matter, this Section 6(d) will not entitle Indemnitee to any
presumption that Indemnitee acted in good faith respecting that matter.


 


(e)           For purposes of any determination hereunder as to
whether Indemnitee is entitled to indemnification under Section 2(a),
neither the knowledge nor the conduct of any other Functionary of the Company
or any Related Enterprise, other than Indemnitee, shall be imputed to
Indemnitee, but Indemnitee will be irrebutably presumed to have read and
understood the Company’s code of business conduct for purposes of any
determination under the Charter Documents or this Agreement as to whether
Indemnitee has performed services or engaged in conduct on behalf of any
Enterprise in good faith.


 


(f)            Indemnitee will be deemed a party to a Proceeding for
all purposes hereof if Indemnitee is named as a defendant or respondent in a
complaint or petition for relief in that Proceeding, regardless of whether
Indemnitee ever is served with process or makes an appearance in that
Proceeding.


 


(g)           If Indemnitee serves or served as a Functionary of a
Related Enterprise, that service will be deemed to be “at the request of the
Company” for all purposes hereof notwithstanding that the request is not
evidenced by a writing or shown to have been made orally.  In the event the Company were to extend the
rights of indemnification and advancement of Expenses hereunder to Indemnitee’s
serving at the request of the Company as a Functionary of any Enterprise other
than the Company or a Related Enterprise, Indemnitee must show that the request
was made by the Board or at its authorization.


 


Section 7.  Remedies of Indemnitee in
Certain Cases.  (a)  If
Indemnitee makes a written request in compliance with Section 5(a) for
indemnification under Section 2(a) and either:


 


(1)           no determination as to the entitlement of
Indemnitee to that indemnification is made before the last to occur of (A) the
close of business on the date, if any, the Company has specified under Section 5(a) as
the outside date for that determination or (B) the elapse of the 45-day
period beginning the day after the date the Company receives that request; or


 


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(2)           a determination is made under Section 5(c) that
Indemnitee is not entitled to that indemnification in whole or in any part in
respect of any Claim to which that request related,


 


Indemnitee will be entitled to an adjudication from
the Court of Chancery of Indemnitee’s entitlement to that indemnification.  Alternatively, Indemnitee, at Indemnitee’s
option, may seek an award in arbitration to be conducted by a single arbitrator
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association.  In the case of
any determination under Section 5(c) that is adverse to Indemnitee,
Indemnitee must commence any such judicial proceeding or arbitration within 180
days following the date on which Indemnitee first has the right to commence that
proceeding under this Section 7(a) or Indemnitee will be bound by
that determination for all purposes of this Agreement.


 


(b)           If a determination has been made under Section 5
that Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced under this Section 7 will be conducted in all
respects as a de novo trial or arbitration on the merits, and Indemnitee will
not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration
commenced under this Section 7, the Company will have the burden of
proving that Indemnitee is not entitled to indemnification hereunder, and the
Company may not, for any purpose, refer to or introduce into evidence any
determination under Section 5(c) which is adverse to Indemnitee.


 


(c)           If a determination has been made under Section 5
that Indemnitee is entitled to indemnification hereunder, the Company will be
bound by that determination in any judicial proceeding or arbitration
Indemnitee thereafter commences under this Section 7 or otherwise, absent:


 


(1)           a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to
make Indemnitee’s statements not materially misleading, in connection with
Indemnitee’s request for indemnification; or


 


(2)           a prohibition of that indemnification
under applicable law.


 


(d)           If Indemnitee, under this Section 7 or otherwise,
seeks a judicial adjudication of or an award in arbitration to enforce
Indemnitee’s rights under this Agreement, Indemnitee will be entitled to
recover from the Partnership, and will be indemnified by the Partnership
against, any and all Expenses reasonably incurred by or on behalf of Indemnitee
in that judicial adjudication or arbitration, but only if Indemnitee prevails
therein.  If it is determined in that
judicial adjudication or arbitration that Indemnitee is entitled to receive
part of, but not all, the indemnification or advancement of expenses sought,
the expenses incurred by Indemnitee in connection with that judicial
adjudication or arbitration will be appropriately prorated between those in
respect of which this Agreement entitles Indemnitee to indemnification and
those Indemnitee must bear.


 


(e)           In any judicial proceeding or arbitration under this Section 7,
the Company:


 


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(1)           will not, and will not permit any other
Person acting on its behalf to, assert that the procedures or presumptions this
Agreement establishes are not valid, binding and enforceable; and


 


(2)           will stipulate that it is bound by all
the provisions hereof.


 


Section 8.  Non-exclusivity; Survival
of Rights; Insurance; Subrogation. 
(a)  The rights to indemnification and advancement of Expenses and
the remedies this Agreement provides are not and will not be deemed exclusive
of any other rights or remedies to which Indemnitee may at any time be entitled
under applicable law, the Company’s Charter Documents, any agreement, a vote of
unitholders of the Partnership or Disinterested Directors, or otherwise, but
each such right or remedy hereunder will be cumulative with all such other
rights and remedies.  No amendment,
alteration or termination of this Agreement or any provision hereof will limit
or restrict any right of Indemnitee hereunder in respect of any action
Indemnitee has taken or omitted in Indemnitee’s capacity as a Functionary of
the Company or any Related Enterprise prior to that amendment, alteration or
termination.


 


(b)           If the Company maintains an insurance policy or policies
providing liability insurance for Functionaries of the Company or of any
Related Enterprise who serve or served in the same capacities as Indemnitee,
Indemnitee will be covered by the policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such
Functionary under the policy or policies. 
If the Company receives written notice from any source of a pending
Proceeding to which Indemnitee is a party and in respect of which Indemnitee
might be entitled to indemnification under Section 2(a) and the
Company then maintains any such policy of which Indemnitee is a beneficiary,
the Company will:


 


(1)           promptly give notice of that Proceeding
to the relevant insurers in accordance with the applicable policy procedures;
and


 


(2)           thereafter take all action necessary to
cause those insurers to pay, on behalf of Indemnitee, all amounts payable in
accordance with the applicable policy terms as a result of that Proceeding;


 


provided, however that the Company need not comply
with the provisions of this sentence if its failure to do so would not actually
be prejudicial to Indemnitee in any material respect.


 


(c)           The Partnership will not be liable under this
Agreement to make or cause to be made any payment of amounts otherwise
indemnifiable hereunder, or to make or cause to be made any advance this
Agreement otherwise requires it to make or cause to be made, to or for the
account of Indemnitee, if and to the extent that Indemnitee has otherwise
actually received or had applied for Indemnitee’s benefit that payment or
advance or obtained the entire benefit therefrom under any insurance policy,
any other contract or agreement or otherwise.


 


(d)           If the Partnership makes or causes to be made any
payment hereunder, it will be subrogated to the extent of that payment to all
the rights of recovery of Indemnitee, who will execute all papers required and
take all action necessary to secure those rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce those
rights.


 


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(e)           The Partnership’s obligation to make or cause to be
made any payment or advance hereunder to or for the account of Indemnitee with
respect to Indemnitee’s service at the request of the Company as a Functionary
of any Related Enterprise will be reduced by any amount Indemnitee has actually
received as indemnification or advancement of expenses from that Related
Enterprise.


 


Section 9.  Duration of Agreement;
Binding Effect.  This
Agreement will continue until and terminate on the later of:


 


(1)           10 years after the date that Indemnitee
has ceased to serve as a Functionary of the Company and each Related Enterprise
that Indemnitee served at the request of the Company; or


 


(2)           one year after the final, nonappealable
termination of any Proceeding then pending in respect of which Indemnitee is
granted rights of indemnification or advancement of Expenses hereunder and of
any proceeding commenced by Indemnitee under Section 7 or otherwise.


 


This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse, if Indemnitee resides in a community property state, heirs, executors
and administrators.


 


Section 10.  Severability.  If any provision or provisions hereof is or
are invalid, illegal or unenforceable for any reason whatsoever:


 


(1)           the validity, legality and enforceability
of the remaining provisions hereof, including each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable, will not in any way be affected or impaired
thereby;


 


(2)           such provision or provisions will be
deemed reformed to the extent necessary to conform to applicable law and to
give the maximum effect to the intent of the parties hereto; and


 


(3)           to the fullest extent possible, the
provisions hereof, including each portion of any Section containing any
such invalid, illegal or unenforceable provision which is not itself invalid,
illegal or unenforceable, will be construed so as to give effect to the intent
manifested thereby.


 


Section 11.  Exceptions to Right of
Indemnification or Advancement of Expenses.  No provision in this Agreement will obligate
the Partnership to pay or cause to be paid any indemnity to or for the account
of Indemnitee, or to advance or cause to be advanced Expenses under Section 3,
in connection with or as a result of:


 


(1)           any Claim made against Indemnitee for an
accounting of profits, under Section 16(b) of the Exchange Act or
similar provision of state statutory or common law, from the purchase and sale,
or sale and purchase, by Indemnitee of securities of the Company or any Related
Enterprise;


 


11

















 


(2)           any Company Claim made against Indemnitee
for:


 


(A)          any unauthorized conversion to personal
use, embezzlement or misappropriation of assets of the Company or any Related
Enterprise or any transaction from which Indemnitee derived an improper
personal benefit;


 


(B)           any forgery or alteration of negotiable
instruments of the Company or any Related Enterprise;


 


(C)           any falsification of the records or
financial statements of the Company or any Related Enterprise for personal or
other reasons; or


 


(D)          any breach of a contractual obligation to
pay or repay or otherwise return money to the Company or any Related
Enterprise; or


 


(3)           except for any Claim initiated by
Indemnitee, whether as a cause of action or as a defense to a cause of action
under Section 7 or otherwise, to enforce or establish, by declaratory
judgment or otherwise, Indemnitee’s rights or remedies hereunder, any Claim
initiated by Indemnitee without the prior authorization of the Board against
the Company or any Related Enterprise or any of their respective present or
former Functionaries.


 


Section 12.  Identical Counterparts.  This Agreement may be executed in one or more
counterparts, each of which will for all purposes be deemed to be an original
but all of which together will constitute one and the same agreement.  Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the
existence of this Agreement.


 


Section 13.  Headings.  The headings of the Sections hereof are inserted
for convenience only and do not and will not be deemed to constitute part of
this Agreement or to affect the construction thereof.


 


Section 14.  Definitions and
Definitional Provisions.  (a) For
purposes of this Agreement:


 


“Affiliate”
has the meaning Exchange Act Rule 12b-2 specifies.


 


“Board” means the Board of Directors of the
Company.


 


“Charter
Documents” means, with respect to any corporation or other entity at
any time, in each case as amended, modified and supplemented at that time:


 


(1)           the articles or certificate of formation,
incorporation or organization, or the equivalent organizational documents, of
that entity;


 


(2)           the bylaws or limited liability company
agreement or regulations, limited partnership agreement, or the equivalent
governing documents, of that entity; and


 


12

















 


(3)           each document setting forth the
designation, amount and relative rights, limitations and preferences of any
class or series of that entity’s capital stock or other equity interests.


 


“Claim” means any claim for damages or a
declaratory, equitable or other substantive remedy, or any other issue or
matter, in any Proceeding.


 


“Company
Claim” means any Claim brought by or in the right of the Company or
a Related Enterprise against Indemnitee.


 


“Court of
Chancery” means the Court of Chancery of the State of Delaware.


 


“Disinterested
Director” means a director of the Company who is not and was not a
party to the Proceeding, or any Claim therein, in respect of which indemnification
is sought by Indemnitee hereunder.


 


“Enterprise” means any business trust, corporation,
joint venture, limited liability company, partnership or other entity or
enterprise, including any operational division of any entity or any operational
group of entities or divisions of entities, or any employee benefit or welfare
plan or related trust.


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended.


 


“Expenses”
include all attorneys’ fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or otherwise participating in, a
Proceeding.  Should any payments by the
Company or a Company Entity to or for the account of Indemnitee under this
Agreement be determined to be subject to any federal, state or local income or
excise tax, “Expenses” also will include such amounts as are necessary to place
Indemnitee in the same after-tax position, after giving effect to all
applicable taxes, Indemnitee would have been in had no such tax been determined
to apply to those payments.


 


“Functionary” of any Enterprise means any natural
person who is a director, officer, manager, administrator, employee, agent,
representative or other functionary of that Enterprise, including, in the case
of any employee benefit or welfare plan, any member of any committee
administering that plan or any individual to whom the duties of that committee
are delegated.


 


“Independent
Counsel” means in the case of any determination under Section 5
a law firm, or a member of a law firm that or who is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent:


 


(1)           the Company or any of its Affiliates or
Indemnitee in any matter material to any such Person; or


 


13

















 


(2)           any other party to the Proceeding giving
rise to a claim for indemnification hereunder.


 


Notwithstanding the foregoing, the term “Independent
Counsel” does not include at any time any Person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or a Related Enterprise or
Indemnitee in an action to determine Indemnitee’s rights under this Agreement.


 


“Partnership
Entity” means any
Related Enterprise, other than an employee benefit or welfare plan or its
related trust, if any.


 


“Person”
means any natural person, sole proprietorship, corporation, partnership,
limited liability company, business trust, unincorporated organization or
association, mutual company, joint stock company, joint venture or any other
entity of any kind having a separate legal status or any estate, trust, union
or employee organization or governmental authority.


 


“Proceeding”
includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution procedure, investigation, inquiry or other
threatened, actual or completed proceeding, whether of a civil, criminal,
administrative, investigative or private nature and irrespective of the
initiator thereof, and any appeal in any such proceeding.


 


“Related
Enterprise” means
at any time any Enterprise:


 


(1)           50% or more of the outstanding capital
stock or other ownership interests of which, or the assets of which, the
Company owns or controls, or previously owned or controlled, directly or
indirectly, at that time;


 


(2)           50% or more of the outstanding voting
power of the outstanding capital stock or other ownership interests of which
the Company owns or controls, or previously owned or controlled, directly or
indirectly, at that time;


 


(3)           that is, or previously was, an Affiliate
of the Company which the Company controls, or previously controlled, by
ownership, contract or otherwise and whether alone or together with another
Person, directly or indirectly, at that time; or


 


(4)           if that Enterprise is an employee benefit
or welfare plan or related trust, whose participants or beneficiaries are
present or former employees of the Company or any other Related Enterprise.


 


(b)           This Agreement uses the words “herein,” “hereof” and “hereunder”
and words of similar import to refer to this Agreement as a whole and not to
any provision of this Agreement, and the words “Section” and “Preliminary
Statement” refer to Sections of and the Preliminary Statement in this
Agreement, unless it otherwise specifies.


 


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(c)           Whenever the context so requires, the singular number
includes the plural and vice versa, and a reference to one gender includes the
other gender and the neuter.


 


(d)           The word “including,” and, with correlative meaning,
the word “include,” means including, without limiting the generality of any
description preceding that word, and the words “shall” and “will” are used interchangeably
and have the same meaning.


 


(e)           The language this Agreement uses will be deemed to be
the language the parties hereto have chosen to express their mutual intent, and
no rule of strict construction will be applied against either party
hereto.


 


Section 15.  Modification and Waiver.  No supplement to or modification or amendment
of this Agreement will be binding unless executed in writing by both parties
hereto.  No waiver of any provision
hereof will be deemed or will constitute a waiver of any other provision
hereof, whether or not similar, nor will any such waiver constitute a
continuing waiver.


 


Section 16.  Reliance.  The Company confirms and agrees with
Indemnitee that it has entered into this Agreement and assumed the obligations
this Agreement imposes on it in order to induce Indemnitee to serve, or
continue to serve, as a Functionary of the Company or a Related
Enterprise.  The Company acknowledges
that Indemnitee is relying on this Agreement in so serving.


 


Section 17.  Notices.  All notices, requests, demands and other
communications hereunder must be in writing or by electronic transmission and
will be deemed delivered and received:


 


(1)           if personally delivered or if delivered
by telex, telegram, facsimile, electronic transmission or courier service, when
actually received by the party to whom the notice or communication is sent; or


 


(2)           if delivered by mail, whether actually
received or not, at the close of business on the third business day in the city
in which the Company’s principal executive office is located next following the
day when placed in the U.S. mail, postage prepaid, certified or registered,
addressed to the appropriate party at the address of that party set forth
below, or at such other address as that party may designate by notice in
writing or by electronic transmission to the other party in accordance
herewith:


 


(3)           If to Indemnitee, to:


 


with a copy, which will not constitute notice for purposes of this
Agreement, to such legal counsel, if any, as Indemnitee may designate in
writing or by electronic transmission; and


 


15

















 


(4)           If to the Company, to:


 


K-Sea GP LLC


One Tower Center
Boulevard, 17th Floor


East Brunswick, New
Jersey 08816


Attention:  Corporate Secretary


Fax No.: (732) 565-3696


E-mail:  rfalcinelli@k-sea.com


 


Section 18.  Contribution.  If it is established, under Section 5(c) or
otherwise, that Indemnitee has the right to be indemnified under Section 2(a) in
respect of any claim, but that right is unenforceable by reason of any
applicable law or public policy, then, to the fullest extent applicable law
permits, the Partnership, in lieu of indemnifying or causing the
indemnification of Indemnitee under Section 2(a), will, or will cause a
Partnership Entity to, contribute to the amount Indemnitee has incurred,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement or for Expenses reasonably incurred, in connection with that
Claim, in such proportion as is deemed fair and reasonable in light of all the
circumstances of that Claim in order to reflect:


 


(1)           the relative benefits Indemnitee and the
Partnership have received as a result of the event(s) or transaction(s) giving
rise to that Claim; or


 


(2)           the relative fault of Indemnitee and of
the Partnership and its other Functionaries in connection with those event(s) or
transaction(s).


 


Section 19.  Governing Law; Submission
to Jurisdiction.  This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. 
Except with respect to any arbitration Indemnitee commences under Section 7
or as Section 2(a) expressly contemplates otherwise, the Company and
Indemnitee hereby irrevocably and unconditionally:


 


(1)           agree that any action or proceeding
arising out of or in connection with this Agreement will be brought only in the
Court of Chancery and not in any other state or federal court in the United
States of America or any court in any other country;


 


(2)           consent to submit to the exclusive
jurisdiction of the Court of Chancery for purposes of any action or proceeding
arising out of or in connection with this Agreement;


 


(3)           waive any objection to the laying of
venue of any such action or proceeding in the Court of Chancery; and


 


(4)           waive, and agree not to plead or to make,
any claim that any such action or proceeding brought in the Court of Chancery
has been brought in an improper or otherwise inconvenient forum.


 


16

















 


Section 20.  Entire Agreement.  This Agreement constitutes the entire
agreement and understanding between the Company and Indemnitee, and supersedes
all prior oral, written or implied agreements and understandings of the Company
and Indemnitee with respect to the subject matter hereof.


 


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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.


 


	
  ATTEST:

  	
   

  	
   

  	
  K-SEA
  GP LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
  K-SEA
  GP HOLDINGS LP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  K-Sea
  GP LLC,

  
	
   

  	
   

  	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
   

  	
   

  
									



 


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